Gen-Probe Shares Tumble on Report Novartis May Not Bid

June 6 (Bloomberg) -- Gen-Probe Inc. fell the most in six
years in Nasdaq trading after the Wall Street Journal reported
Novartis AG may not bid for the medical-test maker, leaving it
with no suitors.

Gen-Probe, which makes tests for sexually transmitted
diseases and blood screening, dropped $10.35, or 13 percent, to
$71.41 at 4 p.m. in Nasdaq Stock Market trading for the biggest
decline since May 2005. The shares are up 22 percent this year.

Novartis may be the last remaining contender for San Diego-based Gen-Probe, after Thermo Fisher Scientific Inc. and Life
Technologies Corp. dropped out of the running, the Journal said.

“Thermo, after they went after Phadia, we felt that their
hands were full,” Peter Lawson, an analyst with Mizuho
Securities in New York, said today in a telephone interview.
“We never saw any clear revenue and cost synergies” in a
purchase by Carlsbad, California-based Life Technologies.

Thermo-Fisher announced May 19 it would buy Sweden’s Phadia
AB, a maker of tests for allergies and autoimmune diseases, for
$3.5 billion. Thermo, based in Waltham, Massachusetts, said it
would fund the acquisition with about $500 million in cash and
the rest with debt.

Joe Jimenez, chief executive officer of Novartis, said May
31 that the Basel, Switzerland-based company viewed diagnostics
as one of the areas where it may make purchases of as much as $3
billion. Novartis, Europe’s second-largest drugmaker, has worked
for 13 years with Gen-Probe to develop and sell tests and
machinery to screen blood for infections.

‘Interesting Space’

“The diagnostics space is a very interesting space for
Novartis and for many companies,” Jimenez said in an interview.

Eric Althoff, a spokesman at Novartis, said today that the
company has no comment.

Jaime Rupert, a spokeswoman for Life Technologies, and Ron
O’Brien, a spokesman for Waltham, Massachusetts-based Thermo
Fisher, declined to comment. Paula Izidoro, a spokeswoman for
Gen-Probe, didn’t immediately return a call seeking comment.

Gen-Probe’s diagnostic testing products generated 96
percent of the company’s $543 million revenue in 2010 and are
used to identify disease, screen donated blood and check the
compatibility of donated organs, according to its website.

The company has more than 100 marketed diagnostic tests and
products and continues to introduce new ones, said Michael
Watts, a spokesman for Gen-Probe. A test for trichomonas, the
most common curable sexually transmitted disease, was approved
April 20 by the U.S. Food and Drug Administration. Tests for
human papillomavirus and a gene implicated in some prostate
cancer cases are pending before the agency, he said.